Japan Government's Pressure on LINE Share Sale Draws Regret from South Korea...Naver: "Open to All Possibilities Including Share Sale in Discussions"

The South Korean government has expressed regret over Japan's pressure on Naver to sell its stake in LINE, albeit belatedly. This action comes in response to the administrative guidance issued by Japan's Ministry of Internal Affairs and Communications to LINE Yahoo, a Naver affiliate, which is essentially pushing for Naver to divest its shares.

Kang Do-hyun, the Second Vice Minister of Science and ICT, held a press conference at the Government Seoul Office at 3 p.m. on the 10th, stating, "While the Japanese government has said that the administrative guidance does not include a demand for share sales, the South Korean company perceives it as pressure to sell shares, and we express our regret over this."

Vice Minister Kang continued, "We will firmly and resolutely respond to discriminatory measures against South Korean companies and any undue measures against their will." He added, "If Naver decides to retain its shares and business in LINE Yahoo, we will support the company in taking appropriate measures to strengthen information security."

At the press conference, the South Korean government made it clear that the target of the regret expression is the 'Japanese government.' During the Q&A session, Vice Minister Kang mentioned, "The Japanese Chief Cabinet Secretary stated that the capital relationship improvement issue raised in the administrative guidance is one of various options." He then pointed out, "Despite this stance by the Japanese government, media reports portrayed it as practical pressure on Naver to sell its shares."

He further added, "While the facts need to be verified, we express regret over the mere existence of such a possibility."

However, the Ministry of Science and ICT views the consideration of share sales itself as Naver's own decision. An official explained, "Although Naver and SoftBank each held a 50% stake in A Holdings, the holding company of LINE Yahoo, LINE Yahoo's management rights have been effectively under SoftBank's control since 2019 through board composition and other means." The official continued, "Naver has faced practical difficulties in applying its technology and expertise to LINE Yahoo, and has been considering various options, including share sales, from a long-term business perspective."

Meanwhile, regarding criticisms that the government has not responded proactively due to the Yoon Suk-yeol administration's policy of restoring relations with Japan, the government firmly denied this. Vice Minister Kang emphasized, "The current situation calls for a crucial decision-making process for Naver regarding its overall business and governance environment." He added, "If we had judged that a South Korean company had faced completely unfair discrimination or pressure, the government's response would have been entirely different."

Meanwhile, an hour before the government's press conference, Naver announced that it is discussing all possibilities, including the sale of shares, with SoftBank. Naver stated, "We are diligently engaging in discussions with SoftBank, exploring all options, including the sale of shares, to achieve the best outcome for our company." Naver added, "We are grateful for the government's consideration, which has clarified the principle that this matter is a decision to be made autonomously by the companies of both countries."